European Stocks Close Lower On Rate Cut Uncertainty, Growth Concerns

(RTTNews) - European stocks closed lower on Friday, weighed down by concerns about the outlook for U.S. interest rate cuts following Federal Reserve Chair Jerome Powell's hawkish comments. Disappointing economic data from China weighed as well.

Investors digested the latest batch of regional economic data and tracked some corporate earnings updates.

Powell said the U.S. central bank does not need to rush to lower interest rates and can approach decisions carefully, given persistent inflationary pressures.

The pan European Stoxx 600 closed down 0.77%. Germany's DAX drifted down 0.27%, France's CAC 40 ended lower by 0.58%, and the U.K.'s FTSE 100 edged down 0.09%, while Switzerland's SMI settled 1.33% down.

Among other markets in Europe, Belgium, Denmark, Finland, Greece, Iceland, Ireland, Netherlands, Poland, Sweden and Turkiye closed weak.

Austria, Norway, Portugal, Russia, Spain ended higher.

In the UK market, B&M European Value Retail closed down 5.12%. GSK ended nearly 4% down. Croda International, AstraZeneca, Relx, Melrose Industries, Associated British Foods, Diploma, Vistry Group, ICG, Halma and BAE Systems lost 2 to 3.4%.

Land Securities climbed 4.3% and Easyjet rallied 3.75%. Fresnillo, Lloyds Banking Group, British American Tobacco, Sainsbury (J), Frasers Group and Aviva gained 2 to 3%.

Prudential, Anglo American Plc, M&G, HSBC Holdings, Antofagasta, Rio Tinto, Legal & General, BT Group, Phoenix Group Holdings, Glencore, JD Sports Fashion and Hikma Pharmaceuticals also closed notably higher.

In the German market, Sartorius declined more than 6%. Merck, Qiagen, Infineon, SAP, MTU Aero Engines, Adidas and E.ON closed down 1 to 2.5%.

Continental and Brenntag gained 3.2% and 3%, respectively. Fresenius Medical Care, Fresenius, Rheinmetall, Siemens Energy, BASF, Henkel, Mercedes-Benz, Deutsche Bank and Volkswagen advanced 1 to 2.3%.

In the French market, Publicis Groupe closed down 5.2%. Capgemini, STMicroElectronics, Sanofi, Dassault Systemes, Legrand, Eurofins Scientific, Pernod Ricard, Schneider Electric and Thales lost 1 to 4%.

Unibail Rodamco climbed 3.2%. ArcelorMittal rallied 2.3%. Credit Agricole, Bouygues, BNP Paribas, Engie, Teleperformance, Carrefour, Saint Gobain and Kering gained 1 to 1.6%.

On the economic front, Data from Destatis said Germany's wholesale prices decreased 0.8% year-on-year in October, slower than the 1.1% drop in September. Wholesale prices have been falling since May 2023, and the latest drop was the weakest in three months. On a monthly basis, wholesale prices slid 0.4% in October, reversing a 0.3% fall in September.

French consumer price inflation matched flash estimate, while harmonized inflation was revised up slightly in October, final data from the statistical office INSEE showed. The consumer price index logged an increase of 1.2% annually in October, slightly up from 1.1% in September. The rate matched the preliminary estimate.

In a blow to Chancellor Rachel Reeves, the UK economy grew only marginally in the third quarter on weaker growth in services output, data from the Office for National Statistics revealed Friday. Gross domestic product grew 0.1% sequentially, following growth of 0.5% in the second quarter and was also weaker than the forecast of 0.2%.

The Eurozone economic growth is projected to pick up next year with acceleration of domestic demand despite risks to global trade from protectionist measures. In the Autumn Forecast, the European Commission retained the economic growth outlook for 2024 at 0.8%. The currency bloc continued to grow at a subdued pace through the second and third quarters amid easing inflationary pressures.

Data showed earlier today that China's industrial output expanded at a slower-than-anticipated 5.3% in October, while retail sales jumped an annual 4.8% to surpass expectations boosted by a week-long holiday and the annual Singles' Day shopping festival.

Property investment fell 10.3% year-on-year in January-October and fixed asset investment growth in the first ten months of 2024 came in below expectations, keeping alive calls for Beijing to unveil more stimulus.